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Printable version
Key Statistics - article, December 2003, p. 9-12
Investment Income in the New Zealand Income Survey1
Introduction
The New Zealand Income Survey is run annually as a supplement to the Household Labour Force Survey (HLFS) during the June quarter (April to June). It was run for the first time in the June 1997 quarter. This article looks at information collected in the June 2003 quarter.
The New Zealand Income Survey collects information on respondents’ pre-tax income for up to three wage and salary jobs; selfemployment; government transfers; other transfers; and total income. Questions relate to the respondent’s most recent pay period, excepting questions on annual income, self-employment income, and investment income, which cover the 12-month-period prior to the interview. The HLFS sample comprises approximately 15,000 private households, sampled randomly from rural and urban areas throughout New Zealand. Of the 92 percent of eligible households that responded to the HLFS, over 84 percent of eligible individuals gave a valid response to the New Zealand Income Survey.
In 2002, for the first time, information on investment income was collected in the New Zealand Income Survey. This means that the New Zealand Income Survey now covers all significant sources of household income.
Currently excluded from the survey are questions relating to income from hobbies, casual jobs and other sources. In this survey, providing information on these sources of income is considered too great a respondent burden.
Proportion of people receiving income from investment
In the June 2003 quarter, income from investments was received by 32 percent of all people. This was the second most important source of income after wages and salaries (received by 51 percent of all people). Similar proportions of males and females received income from investment (33 percent and 31 percent respectively). The proportion of people receiving income from investment rose with age, from 11 percent for the 15 to 19-year age group to 53 percent for the 65 and over age group.
When analysed by ethnic group, the European/Pākehā ethnic group had the highest proportion of people receiving investment income (37 percent), followed by the ‘Other’ ethnic group (23 percent), the Māori ethnic group (12 percent) and the Pacific peoples ethnic group (7 percent). This reflects, in part, the different age structures of the ethnic groups, with the Māori and Pacific peoples ethnic groups having proportionally more people in the younger age groups than the European/Pākehā ethnic group.
The regions with the highest proportion of people receiving income from investment were Canterbury and Otago, both with 37 percent. Auckland (28 percent) and the Manawatu-Wanganui and Waikato regions (both with 29 percent) had the lowest proportions of people receiving income from investment.
Income from investments for the total population
In the June 2003 quarter, the average weekly income for all people from all sources including investment income was $539, while the average weekly income for all people from investments was $29. Males received more income from investments than females ($35 and $23 respectively).
Average weekly investment income varied with age. The youngest surveyed age group, 15 to 19-year olds, received the lowest average weekly income from investments at $1. The 60 to 64-year age group received the highest average amount of income from investments at $87.
The European/Pākehā ethnic group reported the highest average weekly income from investments. On average, those in the European/Pākehā ethnic group received $35 from investment income, while those in the ‘Other’ ethnic group received $15, Māori received $5, and Pacific peoples received $3.
Income from investments contributes to total income both for those in paid employment and for those not in paid employment. Those in paid employment received average weekly income from investments of $28 compared with $29 for those not in paid employment.
Income from investments for those receiving it
The average investment income for those receiving it was $95 per week, with males receiving $111 and females $78. When analysed by age, the trend followed that of the total population with the 15 to 19-year age group receiving an average of just $5 each week from investments, while the 60 to 64-year age group received the highest average amount at $198.
By ethnic group, the average weekly investment income for those receiving it was $99 for European/Pākehā, $72 for the ‘Other’ ethnic group, $46 for Pacific peoples and $43 for Māori.
On average, people living in Auckland and Wellington who received income from investments received the highest weekly amounts at $127 and $107, respectively, while people in Southland received the least at $43.
Proportion of total income
It is interesting to analyse what proportion of their total income the investment income comprises for each sub-group For the total population, the proportion that investment income comprised of total income was less for males than for females (5 and 6 percent respectively). For those who received investment income, it made up a higher proportion of their total income (11 percent for males and 14 percent for females).
For the total population, investment income for the surveyed age groups under 30 years of age comprised less than 1 percent of their total income. The 60 to 64-year age group received the highest proportion of investment income at 16 percent ($87) and the 65 years and over age group received 15 percent of their total income as investment income. The 65 years and over age group receives most of their income from government transfers, and investment income supplements this income. Those aged between 60 and 64 rely less on wage and salary income than the younger age groups but are not yet in the retirement age group and so are more dependent on income from investments than those other age groups.
Figure 4 shows the proportions investment income comprises of the total income for those in paid employment and those not in paid employment. It shows that, for those not in paid employment, income from investment is a much higher proportion of their total income than for those in paid employment. For those aged between 40 and 64 years and not in paid employment, investment income is a major source of income.
Household income
The average weekly household income in the June 2003 quarter was $1,171, which included $53 from investment income. Investment income was received by 39 percent of all households with members aged between 15 and 64. Fifty-seven percent of ‘couples with adult children only’ and 52 percent of ‘couple only’ households received income from investments, while only 12 percent of ‘one parent with dependent children’ households did.
‘Couple only households’ had the highest average household investment income at $99, followed by ‘couples with adult children only’ at $91. The households with the lowest average amount of investment income were ‘one parent with dependent children only’ at $11 and ‘one parent with adult children only and others’ at $12.
The next release of the New Zealand Income Survey is for the June 2004 quarter. This will be in September or October 2004, following the June 2004 quarter release of the Household Labour Force Survey.
Footnote
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